We Will All Pay

by Roy Snell
roy.snell@corporatecompliance.org

We will all pay for the lack of compliance officer independence.

The whole reason the compliance officer profession was created was to give someone independence so they could look at all the facts and help leadership prevent, find, and fix ethical and regulatory problems. Society became frustrated with the number of corporate ethical and regulatory failures and examined them to find the core problem. They saw some consistent facts. Many of the failures were known for some time by leadership but were not corrected because the people involved in the decision making were conflicted. So society decided to create a position that would not be conflicted like the audit profession, but this new position of compliance officer would cover all risk areas. Everything else that a compliance officer does has been done before. All the elements of a compliance program have been around for centuries, education, auditing, investigations, legal analysis, risk assessments, etc.

The compliance professional was created because all those tools were not being applied by an independent person. Enron, WorldCom, Tyco, and Penn State University had all of these elements in place, but they were not in the hands of an independent person. We didn’t have a problem finding problems; we had a problem fixing problems. The compliance professional’s role did not come about just to repeat the approach used in the past. It was created to do something different. Those that refuse to give their compliance officer independence are going to create the same problem that occurred when the audit profession lost their independence. They are going to force the implementation of another regulation like SOX that will mandate compliance professional independence like SOX did for auditors. It will be a long, complicated regulation with expensive, unintended consequences. It will cost businesses a lot of money to comply with the new regulation. The people who should pay all those expenses are those who forced the regulation to be implemented by refusing to give compliance officers independence now. Unfortunately that will not happen. We will all have to pay.